Those of us that are experienced, professional real estate Brokers, tend to have very strong feelings about them, pro or con, so I decided to share with you some of my personal attitudes toward and feelings about “short sales”.
I remember as a kid when my family would be on a road trip across the hot summer highways of West Texas. As I would watch the horizon, and the road ahead, I would see what I would always swear was water on the highway. I knew it HAD to be water, because I could see it with my own eyes. The reality was that it was hotter than hell, and dry as a bone – and what I was ‘seeing’ was in effect a mirage, an illusion, a distortion of perception created by the heat. That, my friends is exactly how I feel about short sale listings. They are nothing more than a mirage.
Lenders do what they want, when they want, if they want ~ and there is no way to predict their behavior or decisions. I’ve facilitated short sales, consulted with short sale and bankruptcy attorneys about it, dealt with asset managers, loss mitigators and bank negotiators, and otherwise kept informed and abreast of the market and the so-called experts and short-sale-gurus’ claims. The seller’s lender(s) hold all the power, and control, and their actions have proven time and time again that they do NOT care one iota about the homeowners, agents, brokers or buyers that are involved in the attempted transaction.
The fact is that only about 10% of all short sale listings in the greater Phoenix real estate market ever make it to closing. Period. And considering that the processing time on short sale transactions is typically 6-18 months, my question is, “Why would any home buyer or investor want to subject themselves to such an ordeal?”
The answer? As one of my clients put it this week, “I want to buy a house and get a smoking deal, i.e., make a good investment!” The unfortunate but realistic truth is that roughly 90% of all short sale properties are ultimately going to end up back on the market as bank owned (foreclosure) properties. Most short sale listings are unrealistically priced below a price point that the seller’s lender(s) will ever seriously consider accepting – which in my opinion is why most of them fail.
But before a lender will even take a serious look at the purchase contract, they will evaluate and scrutinize the homeowner/seller. The seller’s lender(s) will, in their sole discretion and timetable, decide:
Lenders do NOT pre-approve short sales or lay out in advance the sales price that they will accept, so the listing/asking price is nothing but a “phantom” or imaginary price that the listing agent and seller use to attract a prospective buyer and secure a contract. After the contract is in hand, then and only then is when the submission and negotiations begin with the seller’s lender(s). I could go on and on, but I’ll stop here for today. My hope is that all of my readers and clients will see the insanity, futility, false hopes and unrealistic illusions of pursuing short sale properties.
Personally, I would much rather go to Vegas and roll the dice or play the slots. Odds of success are about the same.